Insurance Department Regulation No. 35-D (11 NYCRR 60-2) became effective on July 8, 1992. This
Regulation created a prescribed standard SUM endorsement in New York and required that the new SUM endorsement be provided to policyholders who purchase SUM coverage on or after October 1, 1992. The Regulation was intended to eliminate confusion and ambiguity about SUM coverage.

The Department's authority to promulgate the Regulation in, certain respects has been challenged
in court by the National Association of Independent Insurers, Government Employees Insurance
Company, United Services Automobile Association and State Farm Insurance Company (Petitioners).
Petitioners argue that some provisions in the prescribed endorsement conflict with existing case
law.

On September 9; 1992, Justice Eugene L. Nardelli upheld, the Department's authority to promulgate
Regulation 35-D in Supreme Court, New York County. In so doing, Justice Nardelli' vacated a temporary restraining order and denied a preliminary injunction. The Petitioners sought a stay of that decision pending an appeal to the. Appellate Division, First Department. On September 29th, the Appellate Division issued an order that enjoins the Department from enforcing Regulation 35-D pending a hearing and determination of the, appeal on the condition that
the Petitioners perfect their appeal for the January 1993 term of the Court.

In accordance with the order staying enforcement of the Regulation, the Department cannot require
insurers to issue the prescribed SUM endorsement. However, a number of insurers aware of the
litigation have expressed a desire to file the prescribed endorsement for approval by the Department.
In accordance with Section 2307(b) of the Insurance Law, any insurer that wishes to file the
SUM endorsement specified in Regulation 35-D on a voluntary basis may do so. The Department will
review and, where appropriate, approve such filings for use.

Some insurers currently have form filings pending that utilize the Regulation 35-D endorsement.
If an insurer still wishes to issue that SUM endorsement, it should so advise the Department
in writing and request that the filing be approved. The effective date(s) for the endorsement
should be specified.

In submitting these filings or requesting approval of pending filings, insurers should also acknowledge
this Circular Letter. Of, course, an appropriate rate filing, recognizing the offsetting and
non-stacking provisions of the SUM endorsement, should accompany the policy form filing.